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Thursday 01 May, 2014

FatFace Group Ltd

Intention to float on London Stock Exchange

RNS Number : 0055G

FatFace Group Ltd

01 May 2014

﻿

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (THE "UNITED STATES") (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

This announcement is not an offer of securities for sale in the United States or any other jurisdiction. This announcement is an advertisement and not a prospectus. Investors should not subscribe for or purchase any transferable securities referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") to be published by Fat Face Group Limited (the "Company" or "FatFace" and, together with its subsidiaries, the "Group") in due course in connection with the proposed admission of its ordinary shares (the "Ordinary Shares" or "Shares") to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange plc's Main Market for listed securities (together "Admission"). The Company will be re-registered and renamed as FatFace Group plc prior to Admission. Copies of the Prospectus will, following publication, be available for inspection from the Company's registered office: Units 1-3 Ridgway, Havant, Hampshire PO9 1QJ and on the Company's website at www.fatface.com.

For immediate release

1 May 2014

FatFace Group

Announcement of intention to float on the London Stock Exchange and
appointment of New Directors to the Board

FatFace, the UK lifestyle clothing brand, today announces its intention to proceed with an initial public offering (the "Offer" or "IPO"). The Company intends to apply for the admission of its Shares to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the Main Market for listed securities of the London Stock Exchange plc (together "Admission"). The Offer will comprise an offer of shares to institutional investors.

FatFace offers a wide range of high quality, casual and affordable clothing, footwear and accessories to its target demographic, which is primarily women and men who are family-oriented and attracted by an active, outdoor- lifestyle. The Group's products are designed and developed through an integrated model, by FatFace's UK based in-house design, buying, merchandising and sourcing teams, and are produced by third-party manufacturers.

FatFace was formed in 1988, when Jules Leaver and Tim Slade began selling t-shirts and sweatshirts from a VW Campervan in the French Alps to fund their outdoor lifestyle and the Group opened its first UK store in 1992. Today, the Group markets and sells its products through an integrated multi-channel platform comprising of 208 retail stores across the UK and Ireland, a website which caters for access via computer, tablet or mobile devices, and wholesale and concession agreements with a select number of retail partners. The Group's retail stores are located in market towns, shopping centres, travel hubs and holiday destinations and, as at the date of this announcement, comprise approximately 321,300 sq ft of retail space.

The Chairman of FatFace is Sir Stuart Rose, Anthony Thompson is FatFace's Chief Executive Officer and Helen Cowing is its Chief Financial Officer. In preparation for the IPO, FatFace has appointed Darren Shapland, Deborah Baker and Maria Kyriacou as independent Non-Executive Directors with effect from 1st May 2014. These individuals enhance the strength and depth of leadership within the business at this transformational stage in the Company's development.

Anthony Thompson, CEO of FatFace, said:

"FatFace is an authentic UK lifestyle brand with a genuine heritage and a proven multi-channel strategy. We have worked hard to maintain the brand's unique identity and to develop a differentiated product, authentic and personal service, and a distinct store environment which is loved by our customers. Our brand integrity has been well received by customers and remains our priority.

Since 2010, we have delivered strong financial growth and we believe that we have created a firm foundation for continued expansion within the UK, as well as laying down some initial plans for a controlled trial to take the brand to the United States. I am very proud of everything our management team and crew have achieved. I am confident that our position as a public company will give us the platform to continue growing our customer offer and deliver products which are designed to be loved by all our customers for life outside 9-5."

Sir Stuart Rose, Chairman of FatFace, said:

"FatFace has gone from strength to strength in recent years under the leadership of Anthony and his senior management team. The significant investment in product quality and the clear focus on full price like-for-like sales growth has led to the consistent delivery of impressive financial results and cash generation. The listing of FatFace on the London Stock Exchange marks an exciting stage in the Company's continued growth and development.

I am delighted to welcome Darren, Deborah and Maria to the Board. Their combined retail and public company experience will be invaluable to the Board as we continue our growth as a publicly listed company."

Offer Highlights

· The Group intends to list on the premium segment of the Official List

· Offer to comprise the sale of a portion of Ordinary Shares held by Bridgepoint, certain other shareholders and management (the "Selling Shareholders") plus a primary issue of new Ordinary Shares by the Company to raise gross proceeds of up to approximately £110 million

· Net proceeds of the Offer received by the Group are intended to be used to redeem debt and settle related bank costs and fees

Key Strengths

The Directors believe that FatFace's business has developed successfully because of its focus on core values such as the quality, style and value of the clothing it sells and by providing a differentiated service style and customer experience across its integrated multi-channel offering. The Directors believe that the continued success of the Group will depend on its key strengths, as described below.

Strong brand image in its target market

· The Directors believe that FatFace is an established UK lifestyle clothing brand which resonates strongly with its target market, primarily consisting of women and men who are family-oriented and enjoy an active, outdoor- lifestyle.

· The Group has a genuine and inclusive identity that remains consistent with its heritage and appeals to a broad range of consumers.

A product range that combines quality, style and value

· FatFace's product formula is based on trusted quality, considered style and great value.

· The Group's products are designed in-house, using quality fabrics and trims.

· FatFace products have distinctive design features, are comfortable, relaxed and modern, but are generally not focused on "high" fashion and are positioned at competitive and accessible price points.

· Sales of womenswear products currently constitute the largest portion of the Group's sales mix, representing approximately 49% of total sales for the financial year ended 2013, followed by sales of menswear products, representing approximately 29% of total sales for the same period, with the remainder consisting of kidswear, footwear and accessories such as bags, hats, scarves and jewellery.

A diverse, loyal and expanding customer base

· The Group's products appeal to a wide range of age groups, who enjoy an active, outdoor-oriented lifestyle. A recent customer survey1 illustrated that:

o the Group's customer age profile ranged from 16 to 84, with the largest proportion of FatFace customers being aged between 30 and 50 and the average customer age being 41;

o the Group's customer base is relatively affluent, with 80% categorised as ABC1 under the National Readership Survey demographic categories;

o the Group's customers are also relatively "settled" with 78% married or co-habiting and more than 40% having children under the age of 16; and

o 43% of the Group's customers first shopped with FatFace before 2010 and the brand is attracting new customers of all ages, with approximately 25% of current customers surveyed making their first FatFace purchase in the last 12 months.

· The Group has developed a customer database of over two million postal addresses and over 900,000 email contacts.

A differentiated service style from a committed crew

· FatFace is committed to providing customers with a differentiated service style and customer experience. The Group seeks to recruit people, for both its in-store crew and central customer facing teams, for their attitude focusing on people who are open, friendly and will engage with the customer on a genuine and personal level.

· The Group also has an active social media presence, providing another way for the Group to interact with its customers and crew.

· The in-house FatFace design, buying, merchandising and sourcing teams use considered, purposeful designs combined with quality fabrics, trims and finishes intended to ensure that FatFace's products are made to last and have a consistency of fit.

· The Group's clothing, footwear and accessories are produced by third-party manufacturers. The Group has stable, long standing relationships with its suppliers, strengthened by joint business planning and a commitment to uphold FatFace's well defined ethical practices.

Connected multi-channel retail offering with an established e-commerce business

· The Group's multi-channel retail offering is designed to enable customers to "shop your way" and includes its:

o 208 retail stores across the UK and Ireland at the date of this announcement;

o e-commerce channel that includes a website that services desktop, tablet and mobile users;

o product catalogues and customer hotline;

o in-store Electronic Point of Sale ("EPOS") system which allows in-store customers to order products from the Group's full product range; and

o concession and wholesale partners.

· The Group's website was originally launched in 1998 and has been most recently redesigned and re-launched in October 2013:

o The Group's website offers customers the opportunity to have products delivered directly to their door or, alternatively, delivered to a FatFace store through "click-and-collect".

· According to the FatFace Customer Survey, approximately 70% of customers made purchases in both a retail store and through the e-commerce channel during the previous 12 months.

A differentiated store portfolio critical to the multi-channel offering

· The Group's 208 retail stores are in a broad mix of locations, including market towns, holiday locations, shopping centres and transport hubs.

· The store portfolio is an integral part of the Group's multi-channel retail offering, with customers able to collect e-commerce orders in store and order in store from the Group's full product range.

· The Group is not reliant on any one store. The 10 stores generating the highest revenue in the financial year ended 2013 accounted for 13% of the Group's revenue and the 40 stores generating the highest revenue were responsible for 38% of the Group's revenue.

Strong track record of financial growth and cash generation

· Revenues have increased from £152.7 million for the financial year ended 2011 to £178.8 million for the financial year ended 2013. Drivers of the Group's revenue growth include:

o like-for-like revenue growth2 of 1.7% and 8.6% in the financial years ended 2012 and 2013 respectively;

o expansion of the Group's retail store estate from 190 stores and approximately 269,200 sq ft at the end of the 2011 financial year to 207 stores and approximately 305,000 sq ft at the end of the 2013 financial year; and

o development of the e-commerce channel, where revenue has increased from £13.9 million for the financial year ended 2011 to £21.5 million for the financial year ended 2013.

· In addition to the increased revenue, the Group's Adjusted EBITDA3 has increased from £24.8 million to £31.2 million from the financial year ended 2011 to the financial year ended 2013, with Adjusted EBITDA margin improving from 16.2% to 17.4%.

· The Group is highly cash generative, with free cash flow4 increasing from £18.9 million for the financial year ended 2011 to £29.6 million for the financial year ended 2013. Free cash flow conversion as a percentage of Adjusted EBITDA has improved from 76.1% to 94.9% over the same period.

A clear strategy for future growth with a target retail space of 450,000 to 500,000 sq ft over the next five years

· The Group's strategy is centred on harnessing its brand heritage and adapting it to develop and grow FatFace within its existing and new markets. Key components of the growth strategy include:

o Opening new stores in new markets across the UK at a rate of approximately 8-10 new stores per year, with opportunities identified through the Group's estate management in attractive and well-researched new locations. Since May 2010, the Group's management has typically targeted cash payback periods of 12 months for new stores, with approximately 60% of new stores opened during this period achieving this target. The Group intends to increase the number of stores able to stock its whole retail range by adding 15-20 stores of at least 3,500 sq ft, which is the current minimum size required for a store to hold the entire retail range;

o Extending the store footprint through approximately 40 store relocations and 45 store refits over the next five years. Since May 2010, the Group's management has typically targeted cash payback periods of less than two years on capital expenditures for relocated stores, with approximately 71% of stores relocated during this period achieving this target. In the same period, refitted stores have generated increased sales of approximately 5% to 10% compared to a control group of stores with similar characteristics that did not receive the refit. The Directors believe that refitted stores provide an improved overall environment for customers, with stronger visual merchandising, better windows, additional fitting rooms and improved tills and lighting. In total, including new stores, the Group is targeting an extension of the store portfolio to between 450,000 and 500,000 sq ft over the next five years;

o Increasing e-commerce revenues, both in transaction volume and as a percentage of the Group's revenue through making further website enhancements, developing existing channels such as order in-store and click-and-collect, and increasing the number of customer database records, particularly email addresses, in order to drive customer engagement and maximise the benefit of promotions; and

o Entering international markets through an initial, carefully controlled trial of two to three stores on the east coast of the United States within the next two years. This investment will be complemented through the development and launch of a dedicated website for the United States.

An experienced management team with a strong track record

· The Board of Directors is chaired by Sir Stuart Rose and the management team is led by executive directors Anthony Thompson, CEO, and Helen Cowing, CFO, who are supported by senior executives Simon Pickering, Simon Greene and Mark Seager. Collectively they have 115 years retail experience.

· The team has focused on understanding the Group's core customer base and successfully repositioning the FatFace brand, its products, pricing and retail format to meet customer demands.

· The management team delivered the Group's highest ever revenue and Adjusted EBITDA during the financial year ended 2013.

2014 YTD Results and Current Trading

· The Group's strong performance continued in the 35 week period to 1 February 2014 with revenue growth of 12.4% versus the 35 week period to 2 February 2013; like-for-like revenue growth of 8.4% and Adjusted EBITDA growth of 28.2% to £32.1 million. Adjusted EBITDA margin increased to 22.6% versus 19.8% in the 35 week period to 2 February 2013.

· Since 1 February 2014, FatFace has continued to perform strongly, with total sales continuing to grow in line with the trend seen in the 35 weeks ended 1 February 2014. Since 1 February 2014, the Group has made further investments in the estate in order to expand its retail space and increase sales. The Group has opened one new store, relocated three stores and closed one store, taking the estate to 208 stores and approximately 321,300 sq ft of retail space. Sales through www.fatface.comhave also continued to perform strongly as the Group continues to attract new customers to its website and successfully connect its e-commerce and retail channels.

Details of the Offer

The Group intends to list on the premium segment of the Official List. The Offer will comprise an offer of New Shares to institutional investors.

The issue of New Shares will raise gross proceeds of up to approximately £110 million to allow the Group to redeem existing debt and settle related bank costs and fees. The gross proceeds, after transaction costs, together with the funds available of £90 million from the New Facilities Agreement, will repay all amounts outstanding under the Existing Facilities Agreement. The Company will have net debt, post receipt of the net proceeds of the Offer and after repayment of the Group's existing facilities, at Admission of approximately £60 million. In addition to the New Shares, the Selling Shareholders may realise part of their investment in the Company through the repayment of shareholder loans and, or a sale of existing shares.

The Selling Shareholders will agree to customary lock-up arrangements in respect of their holding of Shares for specified periods of time following Admission.

Immediately following completion of the Offer, it is expected that the Company will have a free float of not less than 25% of the issued share capital of the Company.

It is expected that Admission will take place in May 2014 and that, following Admission, the Company will be eligible for inclusion in the FTSE UK indices.

In relation to the Offer and Admission, Citigroup Global Markets Limited ("Citi") and Jefferies International Limited ("Jefferies") are acting as Joint Global Co-ordinators, Joint Sponsors and Joint Bookrunners. Canaccord Genuity Limited ("Canaccord Genuity") is acting as Lead Manager. Lazard and Co., Ltd ("Lazard") is acting as Financial Adviser to the Company.

Reasons for the Offer and Admission

The Directors believe that the listing of the Shares is a natural next step in the Group's development, which will provide liquidity for existing Shareholders and allow certain of its existing Shareholders to realise part of their investment in the Group. FatFace also believes that Admission will further enhance its profile and brand recognition, provide access to the global capital markets and assist in recruiting, retaining and incentivising management and employees.

Dividend Policy

The Board intends to adopt a progressive dividend policy and initially target a total annual dividend of between 30% and 40% of the Group's annual reported profits after tax. The Board intends that the Company will pay the total annual dividend in two tranches, an interim dividend and a final dividend, to be announced at the time of announcement of its interim and preliminary results respectively, in the approximate proportions of one-thirds and two-thirds, respectively. The Group may revise its dividend policy from time to time.

The Board intends to announce the first dividend at the time of the Group's interim results for the six month period ending 30 November 2014, provided the Group is capable of paying a dividend at that time.

Enquiries

FatFace

Anthony Thompson, Chief Executive Officer

Helen Cowing, Chief Financial Officer

+ 44 (0) 2392 441100

BridgepointJames Murray

+44 (0) 20 7034 3555

Joint Global Co-ordinators, Joint Sponsors and Joint Bookrunners

Citi

David Wormsley

Alex Carter

Edward McBride

+ 44 (0) 20 7986 4000

Jefferies

Robert Foster

Sara Hale

David Watkins

+ 44 (0) 20 7029 8000

Lead Manager

Canaccord Genuity

Bruce Garrow

Joe Weaving

+ 44 (0) 20 7523 8350

Financial Adviser

Lazard

Charlie Foreman

Nick Fowler

Daniel Muldoon

+ 44 (0) 20 7187 2000

Financial Public Relations

MHP Communications

Andrew Jaques

John Olsen

Simon Hockridge

Vicky Watkins

+44 (0) 20 3128 8100

FatFace History

FatFace was formed in 1988, when Jules Leaver and Tim Slade began selling t-shirts and sweatshirts in Meribel and Val d'Isère in the French Alps to fund their outdoor lifestyle. In 1992, the FatFace brand was launched in the United Kingdom, opening its first UK store in Fulham, London. Many of FatFace's core values were cemented in the Group's earlier years: the active lifestyle theme, the iconic in-house designs and the marketing of high quality garments which are great value and made to last. All of these principles remain a central part of the brand.

Following the introduction of separate womenswear, menswear and kidswear product ranges in 1997, the Group experienced rapid growth in the number of stores, increasing from 26 in 1999 to 100 in 2005. In 2007, Bridgepoint Funds acquired a majority holding in the business. In 2010, under the leadership of current CEO Anthony Thompson, FatFace embarked on a 3-5 year plan which was devised by management to differentiate the Group from its competitors. The plan set out the following key initiatives:

· a product formula aimed at delivering quality, style and value for money;

· restoration of brand integrity and trust in order to trade predominantly at a full price offer;

During 2013, the management team was further strengthened by the recruitment of Sir Stuart Rose as Chairman and Helen Cowing as Chief Financial Officer.

Business Overview

FatFace is a UK lifestyle clothing brand. The Group offers a wide range of high quality and affordable casual clothing, footwear and accessories to its target demographic, which is primarily women and men who are family-oriented and attracted by an active, outdoor lifestyle. The Directors believe that FatFace has a distinct and highly recognisable brand image that resonates with its customer base and engenders broad enthusiasm within the organisation. The Group strives to maintain and enhance its distinctive style in the design and quality of its clothing, footwear and accessories and in its commitment to customer service, the store environment and the online experience.

The Group's products are designed in-house by FatFace's design, buying, merchandising and sourcing teams, using quality fabrics and trims in line with the FatFace product formula, which focuses on offering products that combine quality, style and value. The Group's clothing, footwear and accessories are produced by third-party manufacturers. The Group has stable, long standing relationships with its suppliers, strengthened by joint business planning and a commitment to uphold ethical practices.

· 208 FatFace retail stores located in market towns, shopping centres, travel hubs and holiday destinations in the United Kingdom and Ireland, comprising total retail space of approximately 321,300 sq. ft. at the date of this announcement;

· an e-commerce channel that includes customer home, mobile and in-store access to the FatFace website, which received over 13.5 million separate visits during the financial year ended 2013;

FatFace's products are distributed through the Group's distribution centre, located near Portsmouth, England. The Group's distribution centre receives products from third party suppliers and manages the packaging and delivery of FatFace merchandise to the Group's stores and its retail partners, as well as the picking, packing and dispatching of orders placed through its e-commerce channel.

FatFace's products appeal to a wide range of age groups, who enjoy an active, outdoor lifestyle. The Group's customer age profile ranges from 16 to 84, with the largest proportion of FatFace customers being aged between 30 and 50 and average customer age being 41. Sales of womenswear products currently constitute the largest portion of the Group's sales mix, representing approximately 49% of total sales for the financial year ended 2013, followed by sales of menswear products, representing approximately 29% of total sales for the same period. The remainder of the Group's sales consist of kidswear, footwear and accessories such as bags, hats, scarves and jewellery.

The Group's Track Record

Financial Year Ended

35 Weeks Ended

28-May

02-Jun

01-Jun

02-Feb

01-Feb

2011

2012

2013

2013

2014

Total stores at start of period

180

190

199

199

207

Total stores at end of period

190

199

207

205

208

Total sq ft at end of period (k)

269.2

285.8

305.0

297.6

316.7

(£m)

Revenue

152.7

163.6

178.8

126.7

142.4

LFL growth *

3.5%

1.7%

8.6%

7.3%

8.4%

Gross margin *

94.2

95.3

111.1

78.8

91.8

Margin *

61.7%

58.2%

62.1%

62.2%

64.5%

Adjusted EBITDA *

24.8

24.1

31.2

25.1

32.1

Margin *

16.2%

14.7%

17.4%

19.8%

22.6%

* Unaudited non-IFRS / non-GAAP measures

Over the three year historical period to 1 June 2013, the Group's revenue has increased from £152.7 million to £178.8 million. Over the same period, Adjusted EBITDA has increased from £24.8 million in the financial year ended 2011 to £31.2 million in the financial year ended 2013. For the 35 week period ending 2 February 2014, FatFace's revenue increased to £142.4 million from £126.7 million for the corresponding 35 week period ending 1 February 2013. Over the same period, Adjusted EBITDA increased to £32.1 million from £25.1 million.

From the start of the 2011 financial year to the end of the 35 weeks ended 1 February 2014, FatFace has invested significantly in the business, including increasing the total number of stores from 180 to 208 stores (a net increase of 28 stores) and the total square footage of the retail estate from approximately 247,300 sq ft to approximately 316,700 sq ft (a net increase of approximately 28.1%).

The Group's e-commerce sales have grown from £13.9 million for the financial year ended 2011 (approximately 9% of total sales) to £21.5 million for the financial year ended 2013 (approximately 12% of total sales) and £20.8 million for the 35 weeks ended 1 February 2014 (approximately 15% of total sales).

Full price sales as a percentage of total sales, across all of the Group's product lines, were approximately 63%, 69% and 76% for the financial years ended 2011, 2012 and 2013, respectively. This figure for the 35 weeks ended 2 February 2013 and the 35 weeks ended 1 February 2014 was 78% and 81% respectively.

Board of Directors

Executive Director biographies

Anthony Thompson, 50, Chief Executive Officer

Anthony was appointed Chief Executive Officer in April 2010. Anthony was previously Managing Director of the George brand within the international division of Walmart Stores and an executive director of ASDA Stores. He is a former Retail Director of Marks & Spencer, Senior Vice President of Gap Europe and Chief Executive of Blackwell.

Helen Cowing, 47, Chief Financial Officer

Helen was appointed Chief Financial Officer and Director of International in August 2013. Helen was previously Chief Financial Officer at Selecta Group. Helen has extensive international experience and has previously worked across a broad range of industries including food & beverage, shipping and medical supplies. Helen has held senior positions at Kraft, PepsiCo, AP Moller Maersk and Novartis.

Non-executive Director biographies

Sir Stuart Rose, 65, Chairman

Sir Stuart, who was appointed as a non-executive director of the Group in March 2013 and as Chairman in July 2013, has worked in retail all his life having joined Marks & Spencer in 1971. After leaving Marks & Spencer in 1989 he successively managed multiple retail chains at The Burton Group and served as Chief Executive of Argos, Booker and Arcadia. Sir Stuart returned to Marks & Spencer in 2004, as Chief Executive and then Chairman, leaving in 2010. He is Chairman of Ocado and Oasis Dental and a non-executive director of Woolworths (South Africa). He is also on the advisory board of Bridgepoint. He was knighted in 2008 for services to the retail industry and corporate social responsibility.

Deborah Baker, 55, Independent Non-Executive Director

Deborah was appointed as an independent Non-Executive Director effective from 1 May 2014. Since 2007, Deborah has been Director for People at British Sky Broadcasting Group. Deborah has broad experience in human resources and retail, being Senior Vice President, Human Resources at Burberry between 2001 and 2007, Human Resources Director at Booker between 1999 and 2001, Group Human Resources Director at Laura Ashley Holdings between 1996 and 1999, and Human Resources Director at Signet between 1993 and 1996.

Maria Kyriacou, 44, Independent Non-Executive Director

Maria was appointed as an independent Non-Executive Director effective from 1 May 2014. Since 2010, Maria has been Managing Director of ITV Studios Global Entertainment. Maria qualified as a Chartered Accountant with PricewaterhouseCoopers in 1993. Prior to joining ITV, Maria held several positions in the Walt Disney Company including: Senior Vice President, Digital Media Distribution, Europe, the Middle East and Africa, between 2007 and 2010.

Darren Shapland, 47, Senior Independent Non-Executive Director

Darren was appointed as Senior Independent Director effective from 1 May 2014. Darren is a qualified Certified Accountant and has over 25 years experience in financial and operational roles. Most recently Darren was Chief Executive of Carpetright between 2012 and 2013 and prior to this Darren was Chief Financial Officer and Group Development Director of J Sainsbury plc over a six year period from 2005. He was also Chairman of Sainsbury's Bank. Darren is currently Senior Independent Director of Poundland Group, a Non-Executive Director and Chairman of the audit committee of Ladbrokes and a Non-Executive Director of Wolseley.

Guy Weldon, 47, Non-Executive Director

Guy was appointed as a Non-Executive Director of the Company in 2007. Guy joined Bridgepoint in 1990 and is Bridgepoint's Chief Investment Officer with responsibility for the investment activities of Bridgepoint Europe's buyout business. Guy has been a director of Hobbycraft since 2010.

Notes

1 FatFace commissioned a report produced by eDigitalResearch in January 2014 which surveyed 7,705 of the Group's customers who had made a purchase from the Group in the preceding 12 months ("Airlie FatFace Customer Survey")

2 The Group calculates like-for-like revenue growth by analysing the aggregated like-for-like VAT included sales from its retail stores and from the e-commerce channel

3 The Group calculates Adjusted EBITDA as profit/(loss) for the period before net finance income/(expense) and tax, depreciation and amortisation, non-recurring items and share based payments

This announcement includes forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Group's control and all of which are based on the Directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "shall", "risk", "budgets", "projects", "intends", "estimates", "forecasts", "aims", "plans", "predicts", "continues", "assumes", "targets", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors or the Group concerning, among other things, the results of operations, cash flows, financial condition, prospects, growth, strategies, and dividend policy of the Group and the industry in which it operates.

These forward-looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements. Such forward-looking statements contained in this announcement speak only as of the date of this announcement and cannot be relied upon as a guide to future performance. The Company, the Directors, the Selling Shareholders and each of Citi, Jefferies, Canaccord Genuity and Lazard and their respective affiliates expressly disclaims any obligation or undertaking to update these forward-looking statements contained in the announcement to reflect any change in their expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules, or the Disclosure and Transparency Rules of the FCA.

Important notice

The contents of this announcement, which have been prepared and issued by, and are the sole responsibility of the Company, have been approved solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 by Citi and Jefferies.

Neither this announcement nor any copy of it may be taken or transmitted, published or distributed, directly or indirectly, into the United States, Australia, Canada, Japan or South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese or South African securities laws. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe any such restrictions.

This announcement does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Shares or other securities in the United States, Australia, Canada, Japan or South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The Offer and the distribution of this announcement and other information in connection with the Offer and Admission in certain jurisdictions may be restricted by law and persons into whose possession this announcement, any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Neither this announcement nor any part of it nor the fact of its distribution shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

The Offer timetable, including the publication of the Prospectus and/or the date of Admission, may be influenced by a range of circumstances, including market conditions. There is no guarantee that the Prospectus will be published or that Admission will occur and you should not base your financial decisions on the Company's intentions in relation to the Offer and Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering making such an investment should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning the Offer. The value of the Shares can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of the Offer for the person concerned. Past performance cannot be relied upon as a guide to future performance.

This announcement does not constitute an offer to sell or a solicitation of an offer to purchase any securities in the United States or in any jurisdiction in which such offer or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction. Securities may not be offered, sold, resold, pledged, delivered, distributed or transferred, directly or indirectly, into or within the United States absent (i) registration under the Securities Act of 1933 (as amended) (the "Securities Act") or (ii) an available exemption from registration under the Securities Act. The securities mentioned herein have not been, and will not be, registered under the Securities Act and will not be offered to the public in the United States. There will be no public offer of the securities referred to herein in the United States, Australia, Canada, Japan or South Africa. The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada, Japan or South Africa and, subject to certain exceptions, may not be offered or sold, directly or indirectly within Australia, Canada, Japan or South Africa or to any national, resident or citizen of Australia, Canada, Japan or South Africa.

This announcement is only addressed to and directed at persons in member states of the European Economic Area ("EEA") who are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC), as amended ("Qualified Investors"). In addition, in the United Kingdom, this announcement is addressed and directed only at Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order, and (iii) to persons to whom it may otherwise be lawful to communicate it (all such persons being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and Qualified Investors in any member state of the EEA other than the United Kingdom, and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

Any purchase of Shares in the Offer should be made solely on the basis of the information contained in the final Prospectus. The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may or should be placed for any purposes whatsoever on the information contained in this announcement or its accuracy, completeness or fairness. The information in this announcement is subject to change. However, neither the Company nor Citi, Jefferies, Canaccord Genuity or Lazard undertake to provide the recipient of this announcement with any additional information, or to update this announcement or to correct any inaccuracies, and the distribution of this announcement shall not be deemed to be any form of commitment on the part of the Company to proceed with the Offer or any transaction or arrangement referred to herein. This announcement has not been approved by any competent regulatory authority.

Citi, which is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and the Financial Conduct Authority in the United Kingdom, and Jefferies, Canaccord Genuity and Lazard, each of which is authorised and regulated solely by the Financial Conduct Authority, are acting exclusively for the Company and no one else in connection with the Offer and Admission, and will not regard any other person as their client in relation to the Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offer or the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Offer, Citi, Jefferies and Canaccord Genuity and any of their respective affiliates, acting as investors for their own account, may subscribe for or purchase Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own account in such Shares and other securities of the Company or related investments in connection with the Offer or otherwise. Accordingly, references in the Prospectus to the Shares being offered, subscribed, acquired, placed or otherwise dealt in should be read as including any offer to, or subscription, acquisition, placing or dealing by Citi, Jefferies, Canaccord Genuity and any of their respective affiliates acting as investors for their own account. In addition, certain of Citi, Jefferies, Canaccord Genuity or their respective affiliates may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of Shares. None of Citi, Jefferies or Canaccord Genuity nor any of their respective affiliates intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

None of Citi, Jefferies, Canaccord Genuity, Lazard nor any of their respective subsidiary undertakings, affiliates or any of their respective partners, directors, officers, employees, advisers, agents or any other person accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions in this announcement (or as to whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offer, a stabilising manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other transactions with a view to supporting the market price of the Shares at a higher level than that which might otherwise prevail in the open market. The stabilising manager may, for stabilisation purposes, over-allot Shares up to a maximum of 15 per cent. of the total number of Shares comprised in the Offer. The stabilising manager will not be required to enter into such transactions and such transactions may be effected on any stock market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the stabilising manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the offer price. Save as required by law or regulation, neither the stabilising manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Offer.

Certain figures in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not conform exactly with the total figure given.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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